white knight

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White knight

A friendly potential acquirer sought out by a target firm that is threatened by a less welcome suitor.

White Knight

Informal; an acquiring company in a friendly takeover. One usually refers to a white knight when the target company would be otherwise subject to a hostile takeover. That is, the white knight rescues the target company from the prospect of the hostile takeover. While the target company does not remain independent, it is able to negotiate terms with the white knight. Management usually remains in place and shareholders are often paid a higher price. See also: Black Knight, Gray Knight.

white knight

A person or company that rescues a target firm from a takeover attempt by buying the firm. Compare raider. See also hostile tender offer, shark repellent, white squire.

White knight.

A corporation that is the target of a hostile takeover sometimes seeks out a white knight that comes to the rescue by making an offer to acquire the target company in a friendly takeover that suits the needs and goals of the target's management and board.

The hostile acquirer is called a black knight, and if the white knight is outbid by a third potential acquirer, who is both less friendly than the white knight and more friendly than the black knight, the third bidder is called a gray knight.

white knight


white knight

References in periodicals archive ?
1993, "An Empirical Examination of White Knight Corporate Takeovers: Synergy and Overbidding," Financial Management (Winter), 28-45.
103) At least one court has held that break-up fees paid to a white knight are deductible as a business expense under section 162.
A target corporation arranged to be acquired by a white knight as a hostile takeover defense.
White Knight said that the assets consist of three proximally situated oil fields in Fresno County, within the San Joaquin Basin, which has supported major oil and gas extraction for more than a century.
After a number of shakeout flights, the White Knight Two is to be outfitted with the now-under-construction Space Ship Two.
Another view of white knights is advanced by Shleifer and Vishny |24~, who present a model in which acquisition by a white knight represents the optimal synergistic combination of target and bidding firm assets (termed the "maximum synergy hypothesis" in this study).
In particular, the IRS addressed the cost of the fairness opinion since that expense comprised the bulk of the expenses related to the white knight search.
In a corporate control contest for the acquisition of a target, the white knight bid is different from those made by hostile bidders.